by Linda Straker
- Auction on 28 April 2023 to refinance existing Treasury Bills and Treasury Notes
- Treasury Bills issued on Regional Government Securities Market
- Legislative authority is the Public Debt Management Act 2015
The Government of Grenada will seek to raise EC$15 million by auctioning 91-day Treasury Bills on 28 April 2023 to refinance existing Treasury Bills and Treasury Notes.
The Treasury Bills will be issued on the Regional Government Securities Market (RGSM) and traded on the Secondary Market trading platform of the Eastern Caribbean Securities Exchange (ECSE) at the maximum rate of 3.50%. “Bidding for this auction will commence at 9 am and end at 12 pm,” said a notice in the weekly ESCE report for the week ending 21 April.
To lower the cost of Government’s borrowing, Treasury Bills are issued as part of the Government’s Debt Management Strategy to reduce reliance on the overdraft facility. The Legislative Authority is the Public Debt Management Act 2015, Part 3 Section 13.
According to the Government’s Prospectus, which offers details about the auction, each investor is allowed one bid with the option of increasing the amount tendered until the close of the bidding period.
“Yields will not be subject to any tax, duty, or levy by the Participating Governments of the Eastern Caribbean Currency Union (ECCU). The countries are Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St Lucia, St Kitts and Nevis, and St Vincent and the Grenadines.” The prospectus is available on the finance ministry’s website.
Grenada will auction several Treasury Bills during 2023. The first was EC$15 million in 91-day Treasury Bills on 25 January 2023. After the April auction, the next 91-day Treasury Bill auction will be in August.
Justifying why the investment in Grenada’s Treasury Bill will be financially sound, the prospectus said that after the Covid-19 pandemic, public finances continued to bolster in 2022 with an expanded primary surplus. “Public debt is on the decline moving from 70.6% of GDP in 2021 to 63.9% at the end of September 2022, with further declines forecasted over the medium term. The outlook over the medium term remains positive with growth averaging 4.1% during the period 2023-2025 despite considerable downside risks.”
